Question

Corvi Corporation produces and sells one product. The budgeted selling price per unit is $126. Budgeted unit sales are shown below:

	July			August		September		October
Budgeted unit sales	7,300			11,500		14,200		12,100

All sales are on credit with 40% collected in the month of the sale and 60% in the following month. The expected cash collections for August is closest to:

Multiple Choice

• $551,880
• $1,131,480
• $919,800
• $579,600

Answer 1

expected cash collections for August is=(40%*August)+(60%*July)

=(0.4*(11500*126))+(0.6*(7300*126)

which is equal to

=$1,131,480(B)